Today, Advanced Micro Devices (AMD) faced a dip in its stock prices following its first-quarter earnings report, disappointing investors. By 2:44 p.m. ET, the stock was down 7.3%, having dropped as much as 10% earlier in the day.While AMD's first-quarter earnings report met expectations, investors were hoping for a more optimistic outlook, particularly regarding AI chips. Although management projected $4 billion in artificial intelligence (AI) chip sales for the year, it still falls short of the industry leader, Nvidia.

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Furthermore, AMD grapples with the cyclical slowdown in the semiconductor sector. Although revenue saw a modest 2% rise to $5.47 billion and adjusted earnings per share increased slightly from $0.60 to $0.62, surpassing estimates by a penny, sales in gaming and embedded segments, which include automotive, appliances, and infrastructure, experienced significant declines.

Looking ahead to the second quarter, AMD anticipates revenue of $5.7 billion, a 4% improvement from the first quarter and a 6% increase from the same quarter last year. While this forecast surpasses consensus estimates, it highlights AMD's continued wait for a substantial boost from AI.

Despite the stock's decline, it's essential to note that AMD has made significant gains since the beginning of 2023, doubling in value. However, it has now retraced most of its gains for the year, reflecting the latest results and guidance. AMD remains poised for growth in the AI sector, as evidenced by the uptick in data center revenue. However, investors should exercise patience as the broader business contends with the repercussions of corrections in gaming and the embedded segment.